LongBiased Investing Strategies McLane Cover Mistral Capital Partners LLC
Post on: 16 Март, 2015 No Comment

August 2, 2011 — The Wall Street Transcript has just published Investing Strategies Report offering a timely review of the sector. This Special Report contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. Please find an excerpt below.
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McLane Cover is the Founder, President and Chief Investment Officer of Mistral Capital Partners, LLC. He has nearly 30 years of investment experience. Before founding Mistral, Mr. Cover served as Senior Vice President — Investments at The Hartford Investment Management Company (HIMCO). While at HIMCO, Mr. Cover was the Lead Analyst for health care, energy and financial sector research, and he helped oversee four small and midcap equity portfolios. Prior to joining HIMCO, Mr. Cover served in a variety of positions while on the equity sell side. He was a Partner at ThinkEquity Partners, LLC, where he was Head of Institutional Equity Sales and served on the firm’s operating committee. Prior to ThinkEquity, Mr. Cover was a Managing Director in institutional research sales at Citigroup Global Markets and Kidder, Peabody & Co. Mr. Cover also served as a Chair of Citigroup’s equity research steering committee, which was responsible for recommending changes to the firm’s research process. He earned a B.S. with a double major in finance and investments from Babson College.
TWST: Are there certain sectors or industries you feel are particularly well positioned right now?
Mr. Cover: We think technology, energy, industrial and consumer discretionary are the best positioned right now. We also think there are certain areas within health care that are well positioned, and within these industries we are focused primarily on growth companies or companies that are going to benefit from a specific trend. An example in the technology area is cloud computing. Companies in the aggregate are aggressively moving their technology infrastructure to the cloud, which means that they are moving towards a server-based environment, which helps reduce their overall IT costs where they can essentially outsource a lot of the expense to other firms. And so companies that are benefiting from that are operating in the cloud. VMware (VMW) would be a specific holding in our portfolio that is a beneficiary of the cloud.
We have also owned Salesforce.com (CRM) in the past. In the consumer discretionary area, we like companies that have unique products. One example would be SodaStream (SODA), which is a product that’s actually been around for a while in Europe, but recently launched in the U.S. market. The CEO has a very strong consumer background — Nike (NKE), Pillsbury (GIS) — with very strong relationships at key retail chains in the U.S. The product is one of Bed Bath & Beyond’s (BBBY) best-selling products. The company has a razor — SodaStream system — razor blade, CO2 refill, syrups, business model with very high gross margins. The product is fantastic and is seeing exceptionally good growth here in the U.S. The SodaStream product is already proven in Europe, having attained market share of greater than 50% in certain regions.
In energy, we think service companies are best positioned, as a lot of the exploration and production companies increase their expenditures in North America and international markets. Examples there would include National Oilwell Varco (NOV) and Key Energy (KEG). In health care, we like St. Jude Medical (STJ), which is likely to receive FDA approval for its new CRT device called Quadra, and this new device incorporates quadripolar pacing, which significantly increases the market opportunity within the CRT space. And it’s also an important innovation in CRT, which is cardiac rhythm therapy, and expands a multibillion-dollar market opportunity to them.
TWST: Are there some sectors or industries you tend to avoid altogether?
Mr. Cover: We don’t avoid anything permanently. We’re really identifying those industries that have tailwinds and those that have headwinds, but that can change over time. Specifically, right now, we are avoiding the financial services area, although we do have one holding in there, JPMorgan (JPM), because it’s a best-of-breed company. In general, however, we think financials are going to be faced with regulatory headwinds for the foreseeable future. The other area that we tend to avoid is utilities, because they have little to no pricing power and are always fighting input costs and regulatory pressures.

TWST: How often do you turn over your portfolio, and what is your sell discipline?
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